WEBVTT - Applied Digital Drops; Constellation Falls After Weak Outlook; Amazon Letter

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, The.

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<v Speaker 2>Stock Movers Report, your roundup of companies making moves in

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<v Speaker 2>the stock market. Harnessing the power of Bloomberg Data.

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<v Speaker 1>Let's take a look at some stocks on the move today.

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<v Speaker 1>I'm Nathan Hager, joined by Bloomberg's Dan Curtis on a

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<v Speaker 1>mostly down morning for stocks broadly. This morning, we get

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<v Speaker 1>a couple of names moving lower on earnings, including Applied Digital.

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<v Speaker 3>Good morning, Good morning, Nathan, Data center operator. Applied Digital

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<v Speaker 3>is down over four percent in the pre market ticker

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<v Speaker 3>APLD as it after it reported third quarter results with

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<v Speaker 3>gross margins missing estimates. The company took in one hundred

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<v Speaker 3>and twenty seven million dollars for the period, fifty million

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<v Speaker 3>dollars more than estimates, but it's paying more as it grows.

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<v Speaker 3>Nearly one hundred and forty million dollars were spent in

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<v Speaker 3>operating expenses. A large portion of that was thirty nine

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<v Speaker 3>billion dollars in stock based compensation alone. That was off

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<v Speaker 3>of increased headcount and performance rewards. The company also saw

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<v Speaker 3>an overall cash outflow of over seven hundred million dollars

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<v Speaker 3>six times and times analysts outlook On the positive side,

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<v Speaker 3>adjusted earnings per share beat, and the company noted accelerating

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<v Speaker 3>hyperscaler demand not enough to offset the bearish move this morning.

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<v Speaker 1>Okay, we also heard from Constellation brands. Are people drinking Dan?

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<v Speaker 2>Well?

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<v Speaker 3>Constellations actually been holding up better, but even they are struggling.

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<v Speaker 3>The shares underticker STZ are down nearly one percent in

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<v Speaker 3>pre market as the company projected softer than expected growth

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<v Speaker 3>for its beer business this year. That's the company behind

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<v Speaker 3>Corona and Modelo especial. It sees organic beer sales somewhere

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<v Speaker 3>between one percent up one percent down, but Wall Street

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<v Speaker 3>was looking for two percent growth. That shows that Modello

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<v Speaker 3>and Corona are struggling to side step a broader decline,

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<v Speaker 3>and beer Constellation has generally been holding it more strongly.

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<v Speaker 3>As I mentioned, Modello passed bud Light as the top

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<v Speaker 3>selling beer in the US. That's according to Zarkana. So

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<v Speaker 3>people are still drinking a Medelo, but maybe just not

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<v Speaker 3>quite as much.

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<v Speaker 1>All right, Well, we did get some news from Amazon

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<v Speaker 1>this morning. In the CEO letter, what do we need

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<v Speaker 1>to know?

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<v Speaker 3>That's right? So, Andy Jasse wrote to shareholders this morning.

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<v Speaker 3>He highlighted the company's chip business, saying its run rate

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<v Speaker 3>is now over twenty billion dollars and growing at triple

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<v Speaker 3>percentage on an annual basis. That has shares flat this morning,

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<v Speaker 3>but they were down before this letter came back, so

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<v Speaker 3>they have paired some of those losses. He noted the

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<v Speaker 3>company is willing to endure short term free cash flow

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<v Speaker 3>headwinds for substantial long term growth and that spending is

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<v Speaker 3>heavy on the capex side. Two hundred billion dollars approximately

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<v Speaker 3>will be spent this year, and Jasse noted that that

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<v Speaker 3>monetization will likely happen in twenty twenty seven and twenty

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<v Speaker 3>twenty eight, so giving up a little bit now looking

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<v Speaker 3>for longer growth.

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<v Speaker 1>And finally, Dan, we got a headline from Tesla. Apparently

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<v Speaker 1>Elon Musk's company is still in the EV business.

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<v Speaker 3>Apparently it is. That's according to Reuter's which is reporting

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<v Speaker 3>that Tesla's developing a new compact suv and they were

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<v Speaker 3>citing people familiar. They are said to have contacted suppliers

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<v Speaker 3>in recent weeks to discuss details. That has shares again

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<v Speaker 3>about flat, but they were down before this news came out.

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<v Speaker 3>Sources said that the SUV would be produced in China,

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<v Speaker 3>and this follows earlier this year, where Tesla discontinued production

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<v Speaker 3>of both the Model S and Model X, although those

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<v Speaker 3>commanded high price tags.

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<v Speaker 2>This Stock Movers report from Bloomberg Radio. Check back with

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